/biz/ - Business & Finance

>>56540689
NOL's require the ongoing concern (company exiting the CH11 process) to retain at least 50% of shareholder equity in the new entity. For this reason >>56538229 shares were recalled to prevent "expert" market users from abusing this and trading to effect the NOL's. This is also why the judge ordered to know who is a 5% or over holder. The 50% comes about because it means there is NO change in the company ownership. We know that BABY is what Cohen wanted, so it makes sense that equity and cash offer is happening, as there is a retention of the old company, while selling the BABY dept to Cohen to create Teddy. If 49% of shareholders were made whole then it would mean a majority owner now holds the company and NOL's would be null and void for the going concern.

>In the United States, for example, the ability to use NOLs is subject to limitations, including those governed by Section 382 of the Internal Revenue Code. Section 382 imposes restrictions on the use of NOLs when there is a significant change in ownership of a corporation

Key part is SIGNIFICANT change, which means a 50% or more ownership must be made whole.